The Gazette 1993

GAZETTE

V I E W P 0 I NT

IMNAGEMN JUNE 1993

Capping awards is not the answer

However well-intentioned, the proposal by the Minister for Commerce & Tech- nology, Seamus Brennan, TD, to reduce the cost of insurance premiums by placing a cap on the amount that judges could award in personal injuries cases, is misguided. Apparently, the Minister would seek to bar judges from awarding damages higher than the European average. Aside from the very dubious constitutionality of the proposal (which the Minister appears tacitly to accept), any attempt to interfere with the basic rights of ordinary people to be properly compensated when they suffer personal injury through no fault of their own must be viewed with serious concern. Reducing the cost of insurance cover is, undoubtedly, a socially desirable objective but the Minister appears, in responding to direct pressure from insurance and business interests, to be attacking the rights of the most vulnerable sector - ordinary people who are injured. That is not the way forward. The reasons for the relatively high cost of insurance in this country cannot be reduced to any one factor and any changes that might be brought about must be carefully balanced having regard to the rights of all the parties involved. It is facile and unfair to seize solely upon the compensation element in the total costs of the insurance industry and argue that it alone should be reduced. A much broader approach is required under which every aspect of the cost of insurance would be subjected to rigorous examination, including the procedures and administrative practices of insurance companies themselves. It would appear from the public pronouncements of leading members of the insurance industry, business organisations and certain public bodies, notably Dublin Corporation, that a climate of opinion is being inculcated where the entitlement of a person to seek fair and legitimate compensation is being undermined. It is important that both branches of the legal profession, on behalf of the public, would seek to assert

the entitlement of ordinary people to vindicate their rights and to be fully and properly compensated when they have been wrongly injured. This is, after all, the essence of our system of justice. Much has been made of comparative i statistics on the level of awards in Ireland and those pertaining in other J European countries. There are dangers inherent in selectively adopting legal provisions or rules from other jurisdict- j ions without looking more generally, and i in a broader way, at other aspects of the i legal systems in those countries and especially at the employment and social welfare codes that apply to people who suffer injuries. There is a risk that, because European legal systems are very different ffom that in Ireland, we would not be comparing like with like. And, in any event, who is to say that the Europ- ean average in relation to compensation and personal injury cases is just and | equitable in all the circumstances and who is to say that those levels of I compensation would be appropriate for the circumstances that apply in Ireland? It is noteworthy that a report issued last year by Coopers and Lybrand, which examined the cost of motor insurance in this country as compared with the UK, indicated that the level of accidents in this country involving claims for personal injuries was much higher than in the UK. As well as that, motoring costs generally are much higher in this country and our roads are in a much poorer condition. These factors have to be taken into account in looking at insurance costs. Some years ago, the Government concluded that juries were the cause of injuries cases. That did not, apparently, succeed in reducing the level of awards. And there are good reasons for this. One reason is that Irish judges have their own sense of what is fair and equitable having heard all the evidence. It would be highly dangerous, to interfere with the problem and they proceeded to abolish the jury system in personal

the discretion of a judge to award what he regards as proper and just in a particular case. The judge evaluates all the evidence and, in particular, the medical evidence relating to the injuries suffered and is, therefore, best placed to make the decision. And if it is felt by the other side that the trial judge was too generous in damages, there is the right to appeal. Undoubtedly much can be done to reduce insurance costs. It is interesting, in this context, to look now at the MacLiam Report of 1982 on this issue. There we find a host of recommenda- tions, but no action appears to have been taken on many of the recommendations that lie exclusively within the control of Government. We believe that the Government should act now to reform our civil litigation procedures and provide a speedier and more efficient service in the courts. Last year, at the express invitation of the Attorney General, the Law Society agreed to parti- cipate in a working party to examine certain issues relating to personal injury actions in the High Court. That working party also includes representatives from i the Irish Insurance Federation and the : Bar Council. It has already made two reports containing many useful recom- mendations about how such procedures could be improved, thus leading to re- duction in costs. As yet, there has been no response from Government to the reports. If we are going to have European norms in relation to damages for personal injuries it is fair to ask the Government to apply European norms in other areas. In particular, let us have a system of civil i legal aid in this country that equates with Í the European norm. The Government í should address the real issues underlying í the high cost of insurance and provide | better and speedier access to justice ! rather than sending signals to the com- munity that they propose to reduce the ! compensation levels payable to ordinary | people when they suffer serious injuries. • 165